Why Business Owners Should Plan For An Emergency Retirement

Posted in Sellers Articles

Published July 17, 2017

 

Do you own your own business?

 

Smart business owners already have a long term exit strategy in place, like preparing to hand the business over to their children or planning to retire at a certain age.

 

Planning for your eventual exit is a good idea, but you should also consider an emergency exit plan. Ask yourself this question: What will happen to your business if you need to sell unexpectedly?

 

There are many circumstances where a business owner might need to walk away – like the illness of a family member or serious health issues of their own. If something comes along that will prevent you from sustaining your business, a pre-planned emergency exit strategy will allow you to walk away with a financial return instead of nothing at all.

 

“I don’t need an emergency exit strategy, I’ll just follow my long term plan and sell when I’m ready.”

 

An emergency exit strategy isn’t complicated and it isn’t anything like a long term plan. It just means that you and a business broker take a look at your business through a buyer’s eyes and make any necessary changes now instead of during a personal crisis.

 

“Why is it so important to look at my business this way now, when I have no intention of selling in the foreseeable future?”

 

It takes, on average, 9 to 12 months to get a business from listing to closing. This time frame can be lengthened considerably by having a business that isn’t in ready to sell shape.

 

To avoid any lengthy delays you need to think about a buyer’s eyes long before you have any buyers coming through the door. For instance:

 

What can you do to boost your numbers?

To answer this question think about your current marketing strategy. Are you hitting all areas of the market that you could be? Are you fully engaged on social media? Have you had any recent promotions to try and boost business? If you answered no to all of these questions, then perhaps it’s time to refresh your marketing strategy.

 

Are your financial records in an organized and easy-to-understand format?

If you think about your financial records and your first mental image is a cardboard box full of crumpled paper – now is the time to sort that out. A business broker and a CPA who specializes in business transactions will be able to help you organize your records and teach you how to keep them that way.

 

Is the place in total disrepair or in serious need of a deep cleaning?

First impressions last forever, so if your equipment has seen better days or the floor is so dirty it smells – you’d better believe that a buyer will have serious second thoughts about the rest of your business. Anyone who lets the physical aspects of their business fall into such disrepair probably hasn’t had an eye on growth, right? Fix what’s broken when it breaks and make deep cleaning part of your regular routine.

 

If these questions resonate with you, now is the time to implement changes – not when an impending emergency is forcing you to sell. Talk to a business broker now, even if you don’t plan on selling in the foreseeable future, so you can know how to be ready when and if you need to be.

 

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

No Comments »



3 Questions A Business Seller Should Ask

Posted in Sellers Articles

Published July 13, 2017

 

When you are in the thick of selling your business, you will be answering buyer questions, broker questions, attorney questions, accountant questions…the list goes on. It is also important that you ask a few questions of your own, especially of the person who may buy your business.

 

What kinds of things should a seller ask a buyer?

 

The person buying your business will be taking over for you and hopefully continuing all of the hard work you’ve put in during your time as owner. It is important to find out a few things about this new person, especially if you are going to be offering seller financing. You will need to be able to trust that this buyer has what it takes to keep the business open long enough to pay you back. Here are a few of the questions a seller should ask any potential buyer:

 

Have you ever owned a business before? If yes, then what happened to that business? This question will help to establish that this is a person who knows the kind of commitment of their time and energy business ownership requires. If the buyer has never owned a business before, don’t be tempted to write them off. Many people have the drive necessary to own their own business. Remember that at some point you were a rookie business owner too. 

 

Do you have any experience in this industry? Why do you want to own a business in this industry? It is always ideal, although not absolutely necessary, to buy a business that is within your knowledge base because it allows you to start with experience under your belt instead of at the ground floor. This question will help you determine from the get-go what kind of training and consultation periods are going to be required for this buyer.

 

How do you plan to finance this business? Would you require seller financing for this business? Are you a cash buyer? These questions should have already been asked and answered by the business brokers involved long before your first meeting with a buyer, but it is always good to get an answer straight from the source, especially because circumstances may have changed since the question was last asked.

 

As you move through the process of selling your business, just remember that you have the right to ask questions too.

 

Are you a business seller who is curious about the kinds of questions a seller should be asking? Do you have questions about what kinds of answers you should be looking for? Please leave us a comment or question here, and we will be happy to assist you.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

No Comments »



How To Handle Low-Ball Offers When Selling Your Business

Posted in Sellers Articles

Published July 5, 2017

 

If you are a business seller, get ready for a low-ball offer.

 

It is more than likely that you will get at least one offer that you consider far too low. The key to turning a low-ball offer into a successful sale? Attitude.

 

It can feel pretty insulting when a complete stranger takes a look at the the business where you’ve invested you blood, sweat and tears and comes back with what you would consider a ridiculously low offer.

 

Business is an impersonal game, and when you sell your business you will need to take your emotions out of the game if you want to be successful.

 

Don’t look at a low-ball offer as an insult, look at it as a starting point. The listing price of your business should never be the very minimum that you are willing to take, it too is a starting point for buyers.

 

The business transaction process is called a process for a reason. There will be a lot of back and forth between the parties involved over everything from the closing date to the bottom line. If you go into the process with the goal of getting to the closing table, you will be far more successful than if you go in with the attitude that everything must go your way. Also realize that not all buyers are going to think that coming in too low would offend a seller, so keep a good-faith attitude throughout the process about the other side.

 

Once the initial offer is in play, you can begin the process of negotiating for a price that is acceptable for both parties. This is a great time to be using the services of a business broker because they can do the impersonal negotiating for you.

 

During these initial negotiations you will be able to tell pretty quickly if what you have is a serious buyer who is truly motivated to buy your business. If they are a serious buyer, they will be inclined to back up their offer with the reasoning they used to arrive at that price, and will be willing to meet you somewhere in the middle. If they aren’t, then you can move on.

 

Again, it is critically important that you treat all offers, at least initially, as serious offers and that you deal with all parts of the business selling process without getting your emotions involved. Keep you eye on the goal of getting to that closing table and you will have a much more successful transaction.

 

Are you a business seller who keeps getting low-ball offers? Are you having a hard time staying objective? Please feel free to leave us a comment or question here, and we will be happy to help you get to the closing table successfully.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

No Comments »



Big Price? Big Mistake – Selling Your Business

Posted in Sellers Articles

Published June 28, 2017

 

It can be really difficult to see a business that you have built from the ground up objectively, but there is a crucial decision that you will need to make as a business owner that will need to made without any emotion – pricing your business.

 

New businesses come on the market every day that are priced ridiculously high. They might be great businesses, but most of the time a business that has an over-inflated price will get no traction on the market and will stay listed forever.

 

When a business first hits the market it can create a lot of action from buyers, but those buyers can be permanently driven away if the price is completely insane.

 

So why do people list their businesses too high?

 

Usually one of two things has happened:

 

They got some bad advice. There are great professionals like business brokers and business transaction accountants that can help a business owner price their business correctly right out of the gate. There are, on the other hand, lots of people who know little to nothing about the buying and selling of businesses who give terrible pricing advice. Your brother-in-law who sold his bar in 1986, the CPA who does your taxes, your attorney neighbor who practices labor law – while well intentioned, none of these people know anything about the business market or about what a business like yours could actually sell for. Seek the advice of a qualified business broker who will know how to price your business the right way – to sell.

 

They wouldn’t listen. Even though you have put all of your blood, sweat and tears into your business, a buyer is only interested in numbers you can prove. Your business broker will help you use comparable businesses that have already sold, the numbers you have on the books and other pricing qualifiers to help you set your asking price realistically. Pricing only becomes an issue if you as the seller refuse to listen to the advice. A good broker will not let you demand any price you want, they will refuse the listing if you decide that it is your unrealistically high price or “the highway”. Be very wary of a broker who will let you list your business for whatever you demand – you will end up staying on the market indefinitely.

 

The message here? Seek proper advice and then listen to that advice. Successful business sellers go into the selling process with realistic expectations and with the right help.

 

Are you a business seller who made the mistake of pricing your business too high? Have you asked for advice on setting the price but got an answer you didn’t agree with? Please feel free to leave us a question or comment here, and we will be happy to help you with finding the right price for your business.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

No Comments »



Honesty About A Sinking Ship: Fix It Or Disclose It

Posted in Sellers Articles

Published June 26, 2017

No matter what you’re selling, it becomes exponentially more difficult to sell something that is broken than something in proper working order. It should also go without saying that it is very unethical to try and pretend a broken thing works when trying to sell it to another person.

 

These basic sales truths hold true in the small business market as well. If your business is a sinking ship that you are trying to escape from – you have only two options. Fix it, or disclose it.

 

What do we mean by this?

 

Let’s say your business owes an enormous amount of money to vendors or the IRS. You might think you have to hide ugly debt and pass the buck onto the next owner, but it won’t work. It will absolutely come out during the due diligence process. Your choices here are to pay the debt, or (if paying the debt is impossible) be upfront with prospective buyers about how much money the business owes. You might be surprised that for the right business opportunity buyers may be willing to deal with the debt in order to buy your business. If you try to go the other route and hide the issue, your deal will absolutely fall apart.

 

What if you have a ton of broken equipment? It might seem silly to spend a ton of money upgrading equipment you aren’t personally going to use, but if you were selling a house you’d probably paint and fix broken fixtures or doors. The same holds true for a business. Think of upgrades before selling as a way to strengthen the price of the business. A buyer isn’t going to pay top dollar for broken stuff, but they might if everything is working and/or new. Don’t take the chance and try to conceal broken equipment – you’d better believe buyers are going to figure it out and come after you.

 

These are just two examples, but there are many more skeletons that can lurk inside of small businesses. The message here is you absolutely, positively must be honest and upfront about why you are selling and what is wrong in your business. Problems aren’t necessarily the kiss of death for business deals, they are simply just points of negotiation. Hiding problems, on the other hand, will mean your business will never sell.

 

Are you thinking about selling but are worried about what buyers might find? Do you think the flaws in your business are deal-killers? Would you like to know more about how to turn flaws into negotiation points? Please feel free to leave any questions or comments here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

No Comments »



Small Business And Immigration: Why Business Owners And Foreign Investors Should Be Paying Attention

Posted in Sellers Articles, Visa/Immigration

Published June 22, 2017

Immigration. Walls. Visas. Bans.

 

The news cycle in the last few months has been awash with immigration upheaval, so much so that many people have started to tune it out.

 

If you are a business owner, especially one that is considering selling sometime in the near future, you really need to be paying attention to what’s going on in the world of immigration. The negative perception recent immigration changes created may end up having a dramatic effect on your business and your ability to successfully sell.

 

If you are a foreign investor who is considering a move to the United States, you should also be paying attention because immigration issues and changes could potentially slow down those plans.

 

Take the two on-hold travel and refugee bans. These bans not only stopped people from the seven and then six Muslim-majority nations from entering the United States, it made a dramatic and symbolic declaration about where America as a whole stands on issues of religious acceptance – whether that was the intention or not. In the wake of the travel ban there was a wave of canceled trips to the United States that affected the tourism industry (and the small businesses that industry supports) in a big way. Many foreign tourists canceled their trips to the U.S. because the bans created a perception that they might be stopped at the border or might face intolerance while here.

 

The second big piece of news was the new guidelines that will affect the H-1B Visa. While this Visa isn’t typically used by small businesses, the ripple effect of changes to this Visa program are being felt across the small business world. Like the travel ban, scaling back the recruitment of specialized foreign labor, especially in the technology sector, has damaged the perception of the United States as a tolerant place to work.

 

Visas were also in the news because of the Kushner family and their pitch to Chinese investors about the EB-5 as a pathway to citizenship in the United States.

 

The EB-5 program is much smaller than it’s more well known H-1B counterpart, and is vastly different in both purpose and requirements – but the reporting on both have cast the entire Visa system in a very negative light. The EB-5 is an investor Visa, meaning those who qualify have the intention of investing a substantial amount (think upwards of $500,000) in a business within the United States that will create jobs for American citizens – and the investor is granted a Visa for themselves and their immediate family (spouses and children) in return. EB-5 Visas are good for the economy in general and have long been used to fund major building projects that would in turn help small businesses in the surrounding areas. Losing or major restriction of the EB-5 would likely cause big problems for new building projects that boost the local small business economy.

 

Another major Visa program that touches the small business world is the E2 Visa. Like the EB-5, the E2 is an investor Visa – although it requires less capital. The E2 is typically used when foreign entrepreneurs want to buy a small business and use that ownership as a means to immigrate to the United States.

 

Although the E2 hasn’t caught the attention of the media or the current presidential administration, it would be worth paying attention if your business would help a foreign investor qualify for the E2 (pre-qualifying your business opens your pool of potential buyers to international buyers – a smart move). Changes to the E2 could result in fewer foreign investors coming to the U.S., which would be bad for small business sellers and foreign investors alike.

 

What’s a business owner to do? If you are considering selling your business, you might want to keep an eye on immigration policy changes, especially if your business is one that would qualify for the E2. If you are a foreign investor, don’t panic. If you’ve been keeping tabs on our immigration news cycle then you know that every potential change to the immigration system has been met swiftly and intensely with legal maneuvering, push-back and protest. The United States is a country made up of immigrant entrepreneurs and the descendants of those immigrant entrepreneurs. Massive change has little chance of long term survival because those changes are proving to be highly unpopular.

 

Have more questions about the link between small businesses and immigration? Contact us or visit www.E2Visa.com for more.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

1 Comment »



You Can’t Pass On Your Passion – Why You Should Sell Your Family Business

Posted in Sellers Articles

Published June 19, 2017

Successful entrepreneurs share one very important thing – passion.

 

They have the drive to get up every morning and push their business to success.

 

Business owners who intend to hand their family business on to the next generation should consider that passion for your business isn’t something you can pass on when you give someone the keys.

 

Your children may have worked in your business since they were very young, but ask yourself this: if they could have chosen to do anything, would they choose to do this?

 

 

What happens when a family business is handed down to someone who either lacks the drive to be a successful entrepreneur or doesn’t really want the business they are given? The business takes a nose dive and dies. We’ve seen it happen many, many times.

 

Want a better outcome and future for both your business and your kids? First and foremost, ask your children about their own passions. If running your business for the rest of their working life doesn’t make the list – sell your business instead.

 

Selling means you can get a return on the personal investment you’ve made in your business. You can use that money to enjoy your retirement or perhaps to invest in a business that your children actually want. This way you can continue the entrepreneurial tradition of your family while preserving your children’s potential for success by allowing them to do something they really want to do.

 

Don’t let an unwilling heir run your business into the ground. Sell instead!

 

Are you worried that your children don’t have the drive to run your business once you retire? Would you like to know more about how to sell and then reinvest in a business where they could be successful? Feel free to contact us today.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

No Comments »



How Does A Business Seller Get Top Dollar? It’s All In The Books

Posted in Sellers Articles

Published June 12, 2017

Unless you own an accounting firm, it’s likely that the record keeping and accounting parts of your business aren’t necessarily your daily top priority. You have a business to operate, employees to manage, inventory to sell.

 

 

However, if you are thinking about selling your business in the future – those record keeping and accounting skills will be paramount in getting you the biggest bang for your business investment.

 

How? Think about this point from a buyer’s perspective.

 

You are looking at two nearly identical businesses. They are in the same industry, in similar markets and locations and they generate the same amount of cash flow. The first business has immaculate records that stretch all the way back to the day they opened the doors – tax returns, P&L statements, inventory records, payroll records, the list goes on. When you as a buyer request records for this first business, they are already complete and organized and are handed over almost immediately.

 

For the second business, a request during due diligence for records gets you a poorly copied set of two years of tax returns and a box of receipts.

 

Remembering that these businesses are essentially the same in terms of cash flow, which one are you going to be willing to buy and which one will you pay more money for? The first business, right?

 

Why? You know what you’re getting. The history of the business, the current numbers, the contracts and leases – everything is right there for you to look at. There’s no guessing or lack of transparency. It’s all there on paper in black and white.

 

If this scenario has you instantly picturing the dusty box of receipts shoved under your desk – all is not lost. Getting your books in order may be challenging, but the return on investment of time will likely be substantial. You want buyers to be looking at how well your business is doing, not wondering how someone so disorganized keeps the doors open.

 

If you need help, help is available. Your business broker can guide you and refer you to a CPA who specializes in making records useful during a business transaction. All you need to do is ask and be upfront about the condition your records are actually in.

 

Are you panicking about the box of disaster under your desk? Would you like to know what types of records business buyers are going to want to see? Please feel free to leave any questions or comments here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

 

No Comments »



Weighing The Experts: Are You Really Getting Expert Advice Concerning Your Small Business?

Posted in Sellers Articles

Published June 8, 2017

 

As a business owner, you are your own Board of Directors, as all major business decisions are made by you alone. This can be a big job, especially because you may be an expert at running your own business, but you are not an expert at everything.

 

Who do you turn to when you need an expert’s advice?

 

For many small business owners, the answer is simple; you turn to your accountant or your attorney for help. Is this a good idea? It absolutely is in some circumstances, but there are important caveats for using this advice.

 

What about my attorney?

Your attorney is probably very specialized as almost all attorneys are. This specialization in the legal field is only going to help your business if you are using the appropriate attorney for the appropriate reason. You should have a business law attorney as your primary counsel, and then employ a more specific attorney if necessary, like a business litigation attorney if you are party to a lawsuit or an attorney who specializes in labor laws for a labor dispute.

 

What if you want to sell your business?

If you are looking to sell your business, then you will need an attorney who specializes in business transactions.

 

Why not just use your primary business attorney?

There are a few reasons. First, business transactions require specific knowledge just like any other area of the law, so a business transaction attorney is going to be the most knowledgeable.

 

Second, selling a business, like all other business related decisions, comes with a bit of risk. The job of your primary attorney is to protect you from any and all risk, so they are likely to advise you against your own business sale because of the inherent risk. Non-transaction attorneys kill business deals every day, deals that would have been fine had the appropriate counsel been sought.

 

Third, transaction attorneys are more efficient at negotiating and closing business deals than an attorney who has never closed a business deal before. It will mean less billable hours and more money in your pocket if you use a transaction attorney instead.

 

What about your accountant?

Accountants are different from attorneys because they are typically not as specialized, although you should really use as your primary accountant a CPA who has experience in your particular industry. Your primary accountant should be able to help you organize your financials and prepare your tax returns.

 

What your primary accountant should not do is give you a valuation for your business, or give you a valuation for any business you are looking to purchase.

 

Why? Business valuations are complex, and there are accepted methods for preparing a business valuation that an accountant who does not specialize in this field will not know. Typical valuations done by an unqualified accountant leave business owners with unrealistic expectations in the business market. Avoid this pitfall by hiring an accountant who specializes in business valuations.

 

The message here is you should absolutely listen to the advice of your attorney and accountant, but only if they are giving you advice within their realm of expertise. Hire a team of experienced professionals, and then only use each for what they specialize in. In the long run, it will save you from suffering the consequences of uninformed advice.

 

Are you a small business owner who has dealt with the consequences of uninformed advice? Leave us a comment or question here, and we will be happy to assist with getting you more informed answers.

 

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

No Comments »



3 Reasons This Is Your Year To Sell

Posted in Sellers Articles

Published May 29, 2017

 

Thinking about selling your business? The time is now. Here’s why:

 

● The economy is still in an upward trend, which means prospective buyers have access to the capital they need to purchase a business. The small business market is also booming, back up to levels we haven’t seen since the beginning of 2008. If you are a small business owner who survived the recent recession, you might remember how wonderful everything seemed in early 2008, right before the bubble popped. We might not be on the brink of another recession, but market fluctuations are difficult if not impossible to predict.

 

● We will also have a wave of Baby Boomer owned businesses hitting the market in the next few years, and as with anything else, oversupply will mean lower selling prices than you would get today.

 

● You also need to consider that it takes somewhere in the neighborhood of 9 to 12 months to sell the average business. Timing is everything, so if you start the process now you may not have your business sold until 2018. There’s no way to know that the next year or two might bring, so be preemptive instead of reactive and get your business listed in a positive market.

 

Would you like to know what businesses like yours have recently sold for? Do you have questions about the selling process? Please feel free to leave us any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

No Comments »



Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202



Search



Recent Posts

Categories

Archives

Tags